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SMC3 Expands Into Truckload Market With Carrier Costing, Shipper Procurement Programs

FreightWaves

After decades of providing information technology services exclusively to the less-than-truckload (LTL) industry, SMC3 has set its sights on the much-larger truckload sector.
The data provider has built a truckload-centric version of its traditional "activity-based" freight costing platform that allows carriers to plot the specific costs of each step in the order fulfillment process down to the load level, Brian Thompson, SMC3s chief commercial officer, said in an October 7 interview. The platform, which is currently being used by about 20 truckload carriers of varying fleet sizes, is designed to help carriers determine the profitability – or lack thereof – of customers, their freight and their shipping lanes, Thompson said.

Separately, SMC3 will launch a truckload-centric version of its "BidSense" transport procurement program for truckload shippers on January 1 which, like the freight-costing product, has been available to the LTL industry for many years. As the name implies, BidSense is used to facilitate the transport bid preparation process for shippers.

The expansion, which has been in the works for some time, thrusts SMC3 into a bigger and very different world. Depending on the source of the estimates, truckload is 15 to 18 times larger than the $42 billion per year LTL market. Unlike LTL, which uses a hub-and-spoke type structure that involves far more hand-offs and has greater complexity attached to it, truckload service is a relatively clean, point-to-point move. 

The expansion reflects the evolving demands of customers that want SMC3 to provide actionable data on both sectors. The group has lost sales opportunities by not being able to offer both, Thompson said.

The move was also smoothed by the proliferation of electronic logging devices (ELDs) that provides real-time truck-location data, Thompson said. The truckload costing model incorporates actual stop and wait times from drivers' handheld devices to accurately  assess the cost of servicing a shipper or consignee location, Thompson said.

The truckload costing model's roots were put down in October 2015 after SMC3 acquired Transportation Costing Group (TCG), which provided truckload and LTL carriers with what SMC3 at the time called "activity-based cost modeling software and other profitability management tools." Since then, SMC3 has been building the relevant data files and has beta-tested the tool with various carriers, Thompson said. It has proceeded cautiously, and is aware that it will be better off carving a niche within the huge market than trying to bite off more than it can chew, Thompson said.

Part of the learning process, according to Thompson, has been mastering the differences in lingo; for example, a "shipment" in the LTL world is a "load" in the truckload space, he said.

SMC3 was founded in the mid-1930s to support Southern truckers' collective ratemaking activities during truck regulation, and to process and analyze mountains of carrier tariff data. SMC3 pivoted heavily after economic regulation was lifted in 1980, recognizing that companies would need comprehensive data services more than ever in a free-market environment. It has successfully leveraged its formidable data trove and apparatus, though its reliance on the traditional format of Electronic Data Interchange (EDI) has been attacked by more youthful data players as an anachronism in a world of faster and more direct Automated Programming Interface (API) technology.

SMC3s long experience in gathering and delivering detailed costing data in the more granular LTL world should find a fair amount of value among truckload carriers, according to Thompson. As for BidSense, though there are numerous data providers supporting bid procurement, they are mostly generalists and don't focus exclusively on transport, he said.

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